Monday, August 27, 2007

One More Thing about the Fair Tax   [Ramesh Ponnuru]

I should address one point made in a number of the blog responses to Bartlett. Bartlett says that it's deceptive for Fair Taxers to say that they want a 23 percent retail sales tax. What they really want, he says, is a 30 percent tax rate. Under their tax, a $100 product will get slapped with a $30 tax and cost $130. Since 30 is 23 percent of 130, they say it's a 23 percent tax.

The point the Fair Taxers make in response is that 23 percent is the right number to use if you're comparing it to an income tax, and that's right. But most people who hear Fair Taxers say they want a "23 percent sales tax" compare it to the sales taxes they pay. The vast majority of listeners assume that the Fair Taxers are talking about a much lower sales tax than they really are. Every time I have explained the numbers to someone who was sympathetic to the Fair Tax, they immediately become less sympathetic. So whether it's intentionally deceptive or not, the 23 percent figure does mislead people.

08/27 11:59 AMShare